This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
See Cramer's multi-million dollar portfolio for FREE and get his new book Get Rich Carefully! Learn More

3 Things You Should Know About Small Business: May 23

NEW YORK (MainStreet) -- What's happening in small business today?

1. The best banks for small-business loans. Which banks lend to small businesses the most? Not surprisingly, community banks. A new tool called Banking Grades by the Philadelphia-based company MultiFunding found some of the biggest banks have the worst performances in terms of how much small-business lending they do as a percentage of their domestic deposits.

Among the 10 best banks for overall small business lending, Farmers State Bank of Hosmer, South Dakota, Community Bank of Nevada, Iowa, Farmers And Merchants Bank of Milligan, Neb., First Resource Bank of Savage, Minn. and Wright Express Financial Services Corp. of Midvale, Utah rounded out the top five.

Some of the "larger" banks that fared well include Zions (ZION), Synovus (SNV), JPMorgan Chase (JPM) and Wells Fargo (WFC).

"In our opinion, big banks are not well equipped to lend to small businesses," Ami Kassar, founder and CEO of MultiFunding, which helps small businesses find the best loans available to them, tells the Huffington Post. "They are simply too bureaucratic and complex to handle small-business loans well."

The Financial Service Roundtable weighed in on the tool. A spokeswoman said the tool "myopically ignores commitments," referring to 13 major banks that recently announced a $20 billion commitment to increase lending to small firms in under-served communities.

2. Small businesses are not taking advantage of a health care tax credit. Only a fraction of small businesses took advantage in 2011 of a tax credit meant to help them afford employee health coverage, a recent report by the Government Accountability Office has found. Small employers say the nuances of the credit are too confusing to get through, according to a CNNMoney wrap on the GAO findings.

The GAO report cited between 1.4 million and 4 million small businesses that were eligible for the health care tax credit, but just 170,000 claimed the credit last year.

The report said the credit wasn't "large enough to incentivize employers to begin offering insurance," with the average credit being $2,700.

The formula used to determine the credit also includes "odd features, such as counting some workers as 1/15th of an employee and reducing federal help if a firm insures more workers," according to CNNMoney.

The GAO suggests that the Internal Revenue Service revise its procedures. That being said, a June ruling by the U.S. Supreme Court on the constitutionality of mandating health care coverage could mean the tax credit program gets scrapped altogether.

3. Lessons from the GM-Facebook breakup. By now its old news that General Motors (GM) decided to cut its advertising ties with Facebook (FB). But what lessons can small businesses learn from the decision and does it mean that other businesses should cut ties too?

According to a blog post on IdeaCafe, just because GM wasn't able to monetize on its $10 million advertising investment doesn't mean that others are also doomed.

"If you take away anything from the breakup, realize that online initiatives involve many factors, making each account and approach unique," IdeaCafe says. "Don't follow the endeavors of others; rather, situate endeavors sensibly into existing marketing plans."

-- Written by Laurie Kulikowski in New York.

To contact Laurie Kulikowski, send an email to: Laurie.Kulikowski@thestreet.com.

To follow Laurie Kulikowski on Twitter, go to: http://twitter.com/#!/LKulikowski

>To submit a news tip, email: tips@thestreet.com.

RELATED STORIES:







Follow TheStreet on Twitter and become a fan on Facebook.

Stock quotes in this article: ZION, SNV, JPM, FB, GM, WFC 
Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
DOW 16,408.54 -16.31 -0.10%
S&P 500 1,864.85 +2.54 0.14%
NASDAQ 4,095.5160 +9.2910 0.23%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs